This syndicated post originally appeared at Zeus Kerravala's blog.

Cisco added to its long list of acquisitions after recently plucking off Silicon Valley-based Virtuata. Virtuata is a provider of virtual machine and cloud security and will be incorporated into Cisco’s data center group, which is run by former Q-Fabric chief David Yen. No financial details were given but the company only has 15 people, so it’s likely to be a relatively small deal for Cisco.

This is typical of Cisco, which either buys large, market-leading firms like Tandberg or WebEx, or very small technology companies that can be dropped into existing business units. Considering the Obama administration has yet to grant a repatriation holiday, and is unlikely to prior to the election, this is likely to be what we will continue to see from Cisco regarding domestic acquisitions.

This move makes sense for Cisco for a number of reasons. First, security remains the biggest inhibitor to cloud and virtual environments, so adding a security product into the mix makes total sense. Virtuata is also a technology company, making integration into Cisco’s existing products such as its Unified Computing System (UCS) and Nexus-based Fabric much easier than if it had been a product company with a large install base.

There’s clearly a land grab going on for share in the data center market today, with the likes of Cisco, IBM, Dell and HP going at one another. This helps Cisco plug a hole that could let another competitor in. Also, since Cisco is ahead of the competition in data center infrastructure, it certainly behooves Cisco to do what it can to help customers accelerate the deployment of a cloud infrastructure. Virtuata will definitely help with some of the security concerns.

Does this solve all of a customer’s concerns with cloud security? Obviously not, but cloud security is more a long journey than anything. As the market adapts, I fully expect Cisco to continue where it needs to fill product gaps. The company’s ability to execute on acquisitions is one of the reasons it continues to stretch its lead over HP, which is still trying to figure out its product strategy after some of the larger acquisitions it’s made.

The IT landscape continues to change faster than ever before, particularly in the data center sector. I fully expect to see much more M&A activity, particularly from Cisco and Dell as they seem to be the most aggressive of the companies that live below the hypervisor.

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Zeus Kerravala

Zeus Kerravala is the founder and principal analyst with ZK Research. Kerravala provides a mix of tactical advice to help his clients in the current business climate and long term strategic advice.
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